Host Marriott Corp. announced yesterday that company President and Chief Executive Stephen F. Bollenbach would resign to assume a top post with the Walt Disney Co.
As senior executive vice president and chief financial officer of the entertainment conglomerate, Mr. Bollenbach is expected to provide broad business experience and help shore up Disney's recent high-profile management losses, analysts said.
"Disney is a huge enterprise in an area that has dramatic possibilities for growth," said Mr. Bollenbach, 52, who will assume his new position May 1. "And this gives me an opportunity to voice my opinions on all areas of important strategy of their business."
"His collection of achievements are among the finest in the financial and business community," said Disney Chairman and Chief Executive Michael D. Eisner.
Although Mr. Bollenbach's departure from the $3.6 billion Bethesda-based hotel and concession company may cause disruption until a replacement is chosen, analysts expect that Host Marriott will continue to execute the strategy that he put in place: focusing on growth through the acquisition of luxury hotels.
"It's a real loss for Host Marriott, but there's a strong management team in place there and they have an excellent opportunity to generate good returns from their properties," said Camille E. Humphries, an Alex. Brown & Sons Inc. analyst who follows the company.
Host Marriott Chairman Richard E. Marriott will assume Mr. Bollenbach's duties until a replacement is named.
The company said it has formed a four-member search committee to find a new chief executive. The panel includes J. W. Marriott, chairman of Marriott International Inc.
Mr. Bollenbach said he has recommended that the committee consider Matthew J. Hart, Host Marriott's executive vice president and chief financial officer, to replace him.
"This has never been a one-man band," he said. "The company is in pristine condition, and is executing a strategy that will be a good one for years to come."
Mr. Bollenbach, who joined the former Marriott Corp. as its chief financial officer three years ago, helped create Host Marriott in October 1993 when he conceived of a controversial plan to divide hotel ownership from operations.
Prior to Marriott, he worked as CFO for both the Holiday Corp. and Donald Trump's real estate organization, overseeing large restructurings of both.
During his tenure as Host Marriott's chief executive, Mr. Bollenbach became embroiled in a bitter lawsuit brought by bondholders, which claimed the company committed securities fraud after they incurred $18 million in losses on bonds purchased shortly before the announcement concerning the split.
A federal judge dismissed the case in January, although an appeal is pending.
The lawsuit had little impact on Host Marriott's earnings, however, which rose 9 percent to $376 million last year, on total revenues of $1.5 billion. At the same time, Mr. Bollenbach continued to focus on paring away the company's Courtyard, Residence Inn and Fairfield Inn product lines while acquiring full-service properties.
In 1994, Host Marriott acquired 18 luxury hotels for $527 million, while disposing of 51 facilities generating $435 million. The company also recently completed a sale of 21 Courtyard hotels to a real estate investment trust for $179 million.
Host Marriott's portfolio now includes 100 properties in 31 states, totaling 28,600 rooms. The company also controls concessions at 73 airports and along 145 major highways, although in recent weeks it has indicated it may spin off that operation.
Host Marriott's stock closed yesterday at $10.87, down 62 cents on a volume of 7.3 million shares.
Mr. Bollenbach, a California native whose first job was selling ice cream at Disneyland, declined to reveal his new salary or whether it represents an increase over the $1.8 million he received in compensation last year. He will be based in Burbank, Calif., and replaces Richard D. Nanula, who was named president of Disney's retail operation earlier this year.
Disney officials and Mr. Bollenbach declined to comment on whether his new role puts him in line to succeed Mr. Eisner, 53. In the past year, Disney has been rocked by a series of top management losses, including the death of President Frank Wells and the defection of Jeffrey Katzenberg to Dreamworks SKG.
But unlike his experience at Holiday and Marriott, analysts expect few changes after Mr. Bollenbach joins Disney, a company with $12.8 billion in assets and a total market capitalization of $25 billion.
"The appointment says to me they're focusing on internal growth and the financial aspects of the company," said Raymond L. Katz at Bear Stearns & Co.